Policies and Procedures Stemtech HealthSciences, Inc. For New Zealand and Australian Business Partnerships May, 2017
Table of Contents Section 1 Introduction... 6 1.1 Governing Documents... 6 1.2 Purpose of Policies... 6 1.3 Changes to the Governing Documents... 7 1.4 Delays... 7 1.5 Policies and Provisions Severable... 7 1.6 Waiver... 8 1.7 Enforcement... 8 Section 2 - Stemtech Independent Business Partner Status... 8 2.1 The Application... 8 2 2.2. Acceptance of Application... 8 2.3 Stemtech Business Partner Kit... 8 2.4 ID Number... 9 2.5 Product Purchase is not Required... 9 2.6 Business Partner Benefits... 9 2.7 Multiple Applications... 9 2.8 Operation of a Stemtech Independent Business Partnership..10 2.9 Legal Age... 10 2.10 One Stemtech Business Partnership per Household... 10 2.11 Actions of Household Members or Affiliated Individuals... 11 2.12 Corporations, Partnership, Trust and Other Business Entities 12 2.13 Business Entity Reporting Requirements... 12 2.14 Converting to or from a Business Entity Status... 12 2.15 Assumed/Fictitious Business Names... 12 2.16 Annual Renewal of Business Partnership Agreement... 13 2.17 Renewal Fees... 13 2.18 Independent Contractor Status... 14 2.19 Indemnity Agreement... 14 2.20 Income Tax Reporting... 14 2.21 Legal Compliance... 14 2.22 No Exclusive Territories... 15 2.23 Non-Solicitation... 15 2.24 Changes to Business Partnership Agreement... 16 2.25 Changes of Address or Telephone... 16 2.26 Adding Secondary Business Partners... 16 2.27 Inactive Status... 17 REV:MAY17
Section 3 - Sponsorship and Training... 17 3.1 Sponsoring... 17 3.2 On Going Training... 17 3.3 Ongoing Communication with Downline Organisation... 18 3.4 Ongoing Sales... 18 3.5 Enroller or Placement Sponsor Transfer... 18 3.6 Cross Sponsoring... 18 3.7 Voluntary Termination and Re-Application... 19 3.8 Sale, Transfer or Assignment of a Stemtech Business Partnership... 19 3.9 - Transfer upon Death of a Business Partner... 20 3.10 Transfer upon Incapacitation of a Business Partner... 21 3.11 Agreements between Stemtech Business Partners... 21 3.12 Confidentiality and Genealogy Reports... 21 3.13 Loyalty to the Company... 22 3.14 Dissolving a Stemtech Business Partnership, Including Divorce...22 3 Section 4 - Trademarks, Literature and Advertising... 23 4.1 General... 23 4.2 Trademarks and Copyrights... 24 4.3 Literature... 24 4.4 Mass Recruitment, Sales Techniques and Internet Web Site Use... 25 4.5 Catalog and Magazine Advertising and Promotions... 25 4.6 Print Advertising... 25 4.7 Telephone Listing and Display Ads... 26 4.8 Electronic Media... 26 4.9 Endorsements... 26 4.10 Media and Media Requirements... 26 4.11 Representations as a Stemtech Employee... 27 4.12 Telemarketing... 27 4.13- Online Conduct... 27 4.14 Social Media... 30 Stemtech International, Inc. 2017
Section 5 Stemtech Independent Business Partner Status and Compensation.. 34 5.1 Business Partnership Agreement... 34 5.2 Hard Calendar Month... 34 5.3 Payment Date... 34 5.4 Compensation Qualifications... 34 5.5 Adjustments for Returned Products and Marketing Materials..34 5.6 Errors and Omissions... 35 Section 6 International Business Partnerships... 35 6.1 International Marketing... 35 Section 7 Purchase and Sale of Products, Payment and Shipping... 35 7.1 Excess Inventory Purchases Prohibited... 35 7.2 Crossline and Downline Wholesaling... 36 4 7.3 Product Sales... 36 7.4 Payment Options... 36 7.5 Goods and Services Tax... 36 7.6 - Restrictions on Third Party Use of Credit Cards and Checking Account Access... 36 7.7 Timely Delivery of Products and Marketing Materials... 37 7.8 Confirmation of Order and Damaged Goods... 37 7.9 Supply for Business Purposes... 37 7.10 Price Changes... 37 7.11 Retail Pricing and Receipts... 38 7.12 Retail Outlets... 38 7.13 Exhibit Space... 39 7.14 General Order Policies... 39 7.15 Back Order Policy... 39 7.16 Confirmation of Order... 40 7.17 Deposits... 40 REV:MAY17
Section 8 Retail Guarantee, Returns and Refunds... 40 8.1 Returns by Retail Customers... 40 8.2 Returns by Business Partners (Products Purchased for Personal Consumption)... 40 8.3 Returns by Business Partners for Replacement... 40 8.4 Termination Returns... 41 8.5- Return Procedures Return Merchandise Authorization... 41 Section 9 Termination and Non-Renewal... 42 9.1 Involuntary Termination... 42 9.2 Voluntary Termination... 42 9.3 Non-Renewal... 42 9.4 Termination for Inactivity... 43 9.5 Effect of Termination or Non-Renewal...43 5 Section 10 Dispute Resolution and Disciplinary Proceedings... 43 10.1 Grievances and Complaints... 43 10.2 Enforcement Sanctions... 43 Section 11 General Provisions... 44 11.1 Product Claims... 44 11.2 Business Partner Income Claims and Testimonials... 44 11.3 Back Office Access... 45 11.4 Government Endorsements... 45 11.5 Jurisdiction and Venue... 45 11.6 Data Protection... 45 11.7 Dispute Resolution... 46 11.8 Entire Agreement... 46 Stemtech International, Inc. 2017
SECTION 1 - Introduction 6 1 - Governing Documents The Governing Documents (also collectively referred to herein as the Agreement ) of Stemtech HealthSciences, Inc. USA through Stemtech New Zealand Ltd (hereinafter Stemtech or the Company ), collectively, in their present form and as may be amended from time to time, at the sole discretion of Stemtech, shall be defined as: a) The Independent Business Partner (IBP) Application and Agreement and the Terms and Conditions contained therein ( Application or Business Partnership Agreement ), and b) These Policies and Procedures ( P&Ps ) in their current form and as may be amended by Stemtech at its discretion, and c) The Stemtech Marketing and Compensation Plan, which may be amended by Stemtech at its discretion. The P&Ps stated herein are incorporated into, and form an integral part of, the Agreement. Throughout these P&Ps, when the term Agreement is used, it shall refer to the Governing Documents of Stemtech as defined hereinabove. It is the responsibility of each Stemtech Independent Business Partner to read, understand, adhere to, and ensure that he or she is aware of, and operating under, the most current version of the P&P s. It is the responsibility of the Sponsoring Business Partner to provide the most current version of the Governing Documents to the Applicant prior to his or her execution of the Business Partnership Agreement. In the event of any conflict or inconsistency between Governing Documents, Stemtech will decide at their sole discretion which document is to prevail in the circumstances. 1.2 - Purpose of Policies Stemtech is a direct sales company that markets products through Independent Business Partners. It is important to understand that the success and reputation of Stemtech and of each Stemtech Business Partnership is dependent upon the highest integrity of the men and women who market Stemtech products and services and the Stemtech Opportunity. Accordingly, Stemtech Business Partners agree to: Conduct themselves properly and deal with Customers and other Business Partners according to the highest standards of honesty, integrity and fairness with the understanding that unethical business dealings can bring significant damage to the reputation and success of the Company, its products, its opportunity and its Business Partner base as a whole. Represent Stemtech s products and services completely and according to the information contained in the Company s published literature, without making misleading or unauthorised claims. Represent Stemtech s Business Partner compensation plan truthfully and without exaggeration to all prospective Business partners. Fulfill all obligations associated with sponsoring other Business Partners, including the use of their best efforts to provide supervision and training of sponsored Business Partners. Become familiar with and abide by the Company s Policies and Procedures, as amended from time to time and all applicable law, regulations, and ordinances. REV:MAY17
To clearly define the relationship that exists between the Independent Business Partner and Stemtech and to explicitly set a standard for acceptable business conduct, Stemtech has established the Governing Document. Stemtech Business Partners are required to comply with all of the terms and conditions set forth in the Governing Documents, as well as all applicable laws, codes, regulations, statutes and rules governing their Stemtech Business Partnership. Because Business Partners may be unfamiliar with many of these standards of practice, it is very important that all Stemtech Business Partners read, understand and abide by the Governing Documents. Please review the information in these P&Ps carefully. Questions regarding any policy or procedure are to be referred to the Business Service Department. 1.3 - Changes to the Governing Documents Because applicable laws, statutes, codes, regulations, etc., as well as the business environment periodically change, Stemtech reserves the right, in its sole absolute discretion, to adopt, supplement, rescind, modify and/or amend the Governing Documents, as well as its prices. By signing the Business Partnership Agreement, a Business Partner agrees to abide by all amendments or modifications that Stemtech elects to make. Amendments and/or modifications shall be effective not less than thirty (30) days following the publication of notice. Notification of amendments shall be issued through reasonable commercial means, including but not limited to any of the following: posted on Stemtech s website (www.stemtech.com), e-mailed to Business Partners, included in Stemtech periodicals, and/or included in product orders, posting in Business Partner s Stemtech Back Office, or other special mailings. The continued operation of a Stemtech Business Partnership by a Business Partner, or a Business Partner s continued acceptance of any compensation after notice of any revisions to the agreement including, in particular, the Stemtech Policies and Procedures and the Stemtech Compensation Plan, shall be deemed to be acceptance of any and all amendments. 1.4 - Delays Stemtech shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control. This includes, without limitation: strikes, labor difficulties, riots, wars, fires, natural disasters, deaths, curtailment of a party s source of supply, difficulties with a Business Partner s payment for products, and/or government decrees or orders. 1.5 - Policies and Provisions Severable If any provision of the Agreement, in its current form or as may be amended, is found to be illegal, invalid, or unenforceable in whole or in part for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect and shall be construed as if such invalid or unenforceable provision never compromised a part of the Agreement. Stemtech International, Inc. 2017
1.6 - Waiver The Company never gives up its right to insist on compliance with the Agreement and with applicable laws governing the conduct of business. No failure of Stemtech to exercise any right or power under the Agreement or to insist upon strict compliance by a Business Partner with any obligation or provision to the Agreement and no custom or practice of the parties at variance with the terms of the Agreement shall constitute a waiver of Stemtech s right to demand exact compliance with the Agreement. Only an officer of the Company may authorise a waiver. Stemtech s waiver of any particular breach by a Business Partner shall not affect or impair Stemtech s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Business Partner. Nor shall any delay or omission by Stemtech to exercise any right arising from a breach affect or impair Stemtech s rights as to that or any subsequent breach. 1.7 Enforcement The existence of any claim or cause of action of a Business Partner against Stemtech shall not constitute a defense to Stemtech s enforcement of any term or provision of the Agreement. 8 SECTION 2 - Stemtech Independent Business Partner Status In order to receive authorisation from Stemtech to purchase products at Business Partner prices, sell Stemtech Products and Services, Sponsor other applicants into the Stemtech Opportunity and receive commissions, bonuses, and generation overrides under the Stemtech Opportunity, an Applicant must complete the following: 2.1 - The Application All individuals who intend to be active in a Stemtech Business Partnership must complete an online Application. Incomplete Applications will not be accepted. 2.2 - Acceptance of Application The Application must be accepted by Stemtech. Stemtech reserves the right to refuse any Application. The term of the Business Partnership Agreement is for one (1) year from the date of acceptance by Stemtech ( effective date ). Please see Section 2.17 for renewal procedures. Receipt of the Stemtech Business Partner Kit notifies the Applicant that he/she is authorised to be a Stemtech Independent Business Partner and operate a Stemtech Business Partnership. 2.3 - Stemtech Business Partner Kit The Primary Applicant must purchase a Stemtech Business Partner Kit (the KIT ). Purchase of the KIT includes access to online training and marketing materials and a 12-month subscription to the Company newsletter, when applicable. Purchase of the KIT shall not constitute any agreement by Stemtech to enter into a franchise, joint venture, or other business entity relationship with the Business Partner. REV:MAY17
2.4 - ID Number Upon acceptance of the Application by Stemtech, the Applicant(s) will be considered by Stemtech to be Independent Business Partners and authorised to operate a Stemtech Business Partnership. Stemtech will issue to the Business Partnership a Personal Identification Number ( ID Number ). All active individuals of the Business Partnership must use the same ID Number. For example: Susan Smith is the Primary Applicant and her spouse, Ed Smith, is the Second Applicant and they are doing business under the name Smith & Smith. Both 9 Susan and Ed must use the same ID Number assigned to this Business Partnership by Stemtech. In order to avoid delays in processing, all correspondence, orders, etc. are to include the Business Partner s ID Number. 2.5 - No Product Purchase Is Required No person is required to purchase Stemtech products to become a Business Partner. 2.6 - Business Partner Benefits Once the Application has been accepted by Stemtech, pursuant to Section 2.2 above, the applicant is now a Stemtech Independent Business Partner who is entitled to the following benefits: a) To be able to purchase certain Stemtech products and services at wholesale prices b) To retail Stemtech products, which are described in official Stemtech literature c). To receive compensation, under the Stemtech Opportunity, if eligible and in good standing d) To Sponsor other individuals as Business Partners into the Stemtech Opportunity and thereby build a Business Partner Organisation and progress through the Compensation Plan e) To receive periodic Stemtech literature and other Stemtech communications f). To participate in Stemtech Corporate-Sponsored support, service, training, motivation and recognition events, upon payment or appropriate fees, if applicable and in good standing g) To participate in promotional and incentive contests and programmes sponsored by Stemtech for is Business Partners 2.7 Multiple Applications If at any time, Stemtech receives Multiple Applications for the same Applicant(s) that indicate the same Sponsoring Business Partner, only the first Application to be received by Stemtech will be processed. If Multiple Applications are received by Stemtech that contain information for different Sponsoring Business Partners, Stemtech reserves the right to determine the designated Sponsoring Business Partner, without prior notification to either the Applicant or the Sponsoring Business Partner. Stemtech International, Inc. 2017
10 2.8 Operation of a Stemtech Independent Business Partnership Once the Application is accepted by Stemtech and payment for the KIT has been made, the Applicant is authorised to operate a Stemtech Independent Business Partnership. In order to assist Business Partners in making their business successful, Stemtech recommends the following good business practices: a) Business Partners may be required to purchase and maintain a business license. Contact directly the governmental business licensing agency in your residential area for this information. Stemtech does not maintain in its offices a list of governmental licensing requirements for any geographical area. b) Business Partners may be required to file a Certificate of Fictitious Business Name. Contact directly the governmental agency in your residential area for this information. Stemtech does not maintain in its office a list of governmental agencies for any geographical area. See Section 2.15 for Stemtech s business name restrictions. c) Stemtech strongly encourages all Business Partners to keep complete and accurate records of all their business dealings. 2.9 - Legal Age All Primary Business Partners must be 18 years of age or older. The Application is a contractual agreement. Therefore, Primary Business Partners must be of legal age, in their resident state, territory or province, to be solely responsible for contractual agreements and to work. Individuals under the age of 18 years ( minor ) may enrol as a Secondary Business Partner on the same Application as the Primary parent. Stemtech does not maintain information as to the legal age requirements for any geographical area. The Applicant must obtain this information directly from the appropriate governmental agency. Stemtech reserves the right to require evidence to confirm the Applicant s age. 2.10 - One Stemtech Business Partnerships per Household A Business Partner may operate or have interest (legal or equitable) in only one (1) Stemtech Business Partnership. No individual may have an interest in, operate, or receive compensation from more than one (1) Stemtech Business Partnership. Stemtech will consider an exception to this policy if a Business Partner inherits a business pursuant to a bona fide will or testamentary instrument. With exception of spouses, individuals of the same family unit may enter into or have interest in more than one (1) Stemtech Business Partnership. A family unit is defined as spouses or civil partners and dependent children living and or doing business at the same address. (See Section 3.14 for Dissolving which includes persons living in a de facto relationship or civil union together as Stemtech Business partnerships, including divorce). If both spouses or civil partners are active in one (1) Stemtech Business Partnership, BOTH must sign the Business Partnership Agreement. Recognition under the Stemtech Opportunity will only be awarded to those Applicants who complete and sign the Business Partnership Agreement. Stemtech reserves the right to: 1. Prohibit any spouse or civil partner or other individual who has not completed and signed a Business Partnership Agreement from selling Stemtech products and services, REV:MAY17
2. Prohibit any spouse or civil partner or other individual from purchasing products and services directly from Stemtech using the other spouse s or civil partner s Business Partnership account. 3. Prohibit any spouse or civil partner or other individual recognition under the Stemtech Opportunity. Nothing in this Section 2.11 shall restrict or limit the application of Section 2.12 herein. Spouses o r c i v i l p a r t n e r s may each own and operate their own business so long as they comply with the following rules: 11 a. The spouse or civil partner operating the first business (the senior business ) must enroll and maintain five (5) auto-ship Business Partners or auto-ship VIP/ Retail Customers before the other spouse may have an independent business (the junior business ) b. The second spouse or civil partner to enroll an independent business (the junior business ) must be sponsored by his or her spouse (the senior business ) and be placed on the immediate front-line of the senior business. c. The junior business is prohibited from purchasing a Leadership Package if one is available. d. The maximum initial purchase allowed by the junior business is the Team Builder Pack. e. If spouses or civil partners previously operated a position with both signatures on a Stemtech application, one spouse or civil partner will be required to resign the joint position and pay a fee of NZD310 or AUD250 to establish a separate position as noted above. In order to maintain the integrity of the Stemtech Opportunity, family members must be Sponsored as one (1) Stemtech Business Partnership. Family unit members, regardless of whether one of both are signatories to the Business Partnership Agreement, may not have an interest (legal or equitable), or operate any other Stemtech Business Partnership, either individually or jointly, nor may they participate directly or indirectly (as an officer, director, shareholder, partner, or any other legal or equitable classification in a Business Entity) in the operation or management control of another Stemtech Independent Partnership, in any form. An exception to the One Stemtech Business Partnerships per Household policy will be considered on a case-by-case basis if two (2) existing Independent Business Partners marry or enter into a civil partnership or in cases of an Independent Business partner receiving an interest in another Partnership through inheritance or incapacity. Requests for exceptions to policy must be submitted in writing to the Stemtech Business Partnership Service Department within thirty (30) days of the event. 2.11 Actions of Household Members or Affiliated Individuals If any member of a Business Partner s immediate household engages in any activity which, if performed by the Business Partner, would violate any provision of the Agreement, such activity will be deemed a violation by the Business Partner and Stemtech may take disciplinary action. Similarly, if any individual associated in any way with a corporation, partnership, trust, or other entity (collectively affiliated individual ) violates the Agreement, such action(s) will be deemed a violation by the Business Entity and Stemtech may take disciplinary action against the entity as described in Section 9 and/or 10, herein. Stemtech International, Inc. 2017
2.12 - Corporations, Partnerships, Trusts and Other Business Entities A corporation, partnership, or trust (collectively referred to as a Business Entity ) may apply to be a Stemtech Business Partner. Stemtech reserves the right to review the Business Entity s Certificate of Incorporation, Partnership Agreement, or trust documents (these documents are collectively referred to as the Entity Documents ) upon request. An Application must be completed with the name of the Business Entity as the Primary Business Partner and signed by an authorised party of the Business Entity as the Secondary Business Partner. A Business Entity ID Form must also be completed and submitted with the Application. Individuals of the Business Entity are jointly and severally liable for any indebtedness to Stemtech and to comply with the terms and conditions of the Governing Documents. Immediate family members of the officers, directors, shareholders, and/or trustees of the Business Entity are not permitted to enrol individually as Stemtech Independent Business Partners. 2.13 - Business Entity Reporting Requirements Stemtech requires notice of any sale or issuance of stock, partnership interest, or trust interest. In addition, any new officers, directors, shareholders, partners, members, or trustees must complete an individual Application as a Secondary Business Partner. Stemtech reserves the right to take disciplinary action including, but not limited to terminating any Stemtech Business Partnership Entity if it sells or 12 issues any share of its stock, partnership interest, trust interest or any other interest to anyone who does not complete the Application process described here. 2.14 - Converting to or From a Business Entity Status A Stemtech Business Partnership may change its status, under the same Sponsor, to or from a partnership, corporation, or trust or from one type of Business Entity to another by submitting a new Application. When submitting the revised Application, please insert the words RECORD CHANGE in the section designated for the Sponsor s signature as the Sponsor s signature is not needed for a record change. Checks will be issued in the name of the Business Entity. 2.15 - Assumed/Fictitious Business Names Individuals may apply to become a Stemtech Independent Business Partner under an assumed or fictitious business name, provided that the Application includes the legally registered name of the individual or the Business Entity. By way of example only: John Smith / d.b.a. Smith Enterprises Smith Enterprises will appear as the Primary Business Partner and John Smith the Secondary Business Partner. No Stemtech Business Partnership is permitted to file any type of applications or documents with any governmental agencies using the name of Stemtech - HealthSciences, Inc,, and/or any other name associated with Stemtech and/or its products and services. REV:MAY17
2.16 - Annual Renewal of Business Partnership Agreement The term of the Business Partnership Agreement is one (1) year from the date of its acceptance by Stemtech ( Anniversary Date ). Either Stemtech or the Business Partner may elect not to renew the Business Partnership Agreement. Stemtech and the Business Partner waive claims against one another for refusal to renew. If a Business Partner elects to renew the Business Partnership Agreement he/she must renew each year by paying an annual renewal fee on the fifth day of the month following the Anniversary Date in order to avoid late fees and penalties. By way of example only: If the Application was accepted by Stemtech on April 17th, your Required Renewal Date is May 1st and the renewal payment must be received by Stemtech no later than May 1st each year that the Business Partner chooses to renew the Agreement. If the renewal fee is not paid within thirty (30) days after the expiration of the current term of the Business Partnership Agreement, the Business Partnership Agreement will be terminated. It is the sole responsibility of the Business Partner to renew annually his/ her Business Partnership Agreement, whether or not Stemtech chooses to send a reminder notice..13 To avoid the problems associated with inadvertent failure to renew a Business Partnership, Stemtech encourages Business Partners to take advantage of the automatic renewal option on the Business Partner Application and Agreement. If a Business Partner elects to automatically charge to his or her credit or debit card there will be no loss due to inadvertent failure to renew. 2.17 - Renewal Fees Renewal fees may be paid by either: a) Calling Business Partner Services and charging the renewal fee to a credit card b) Electing to participate in the automatic renewal option. No renewal will be accepted by Stemtech without proper payment of the renewal fees. Upon payment of renewal fees, the Primary and Secondary Business Partners agree to continue to abide by the Governing Documents of Stemtech. If a Business Partner has completed a Business Partnership Agreement in more than one country, the Business Partner may renew the Business Partnership Agreement for each country at the same time by contacting the Business Partner Services Department. 2.18 - Independent Contractor Status Every Stemtech Independent Business Partner is an independent contractor operating and responsible for his/her Business Partnership. No Business Partner is an employee, franchisee, joint venture, partner, legal representative, or agent of Stemtech. Business Partners are strictly prohibited from stating or implying, either orally or in writing that he/she is an employee, owner franchisee, joint venture, partner or agent of Stemtech or anything else but an Independent Business Partner. No Stemtech Business Partner has the right or authority to: a) Bind Stemtech to any obligation. b) Enter into any Agreement on behalf of Stemtech c) Make any warranties or representations on behalf of Stemtech d) Represent themselves as an employee of Stemtech to any third party. Stemtech International, Inc. 2017
No Stemtech Business Partner has the right to make any misleading claims which could be damaging to the Company or misrepresent their Independent Contractor Status; or they will be subject to disciplinary sanctions. Independent Contractor Status allows for the Business Partner to access the company Partner Service Department for assistance as needed. The Business Partner must maintain professionalism while communicating with the Company Partner Service Department. No use of profanity or rudeness will be acceptable behavior while communicating with the Company Partner Service Department. 14 2.19 - Indemnity Agreement A Business Partner is fully responsible, as an independent contractor, for all of his/her verbal and written statements regarding Stemtech products, services, and the Stemtech Opportunity, which are not expressly contained in official Stemtech materials. Business Partners agree to indemnify Stemtech and Stemtech s directors, officers, employees, and agents and hold them harmless from any and all liability including but not limited to judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by Stemtech as a result of the Business Partner s unauthorised representations or actions. THIS PROVISION SHALL SURVIVE THE TERMINATION OF THE AGREEMENT. 2.20- Income Tax Reporting AS AN INDEPENDENT CONTRACTOR, Business Partners WILL NOT BE TREATED AS EMPLOYEES OF Stemtech FOR FEDERAL, PROVINCIAL OR STATE TAX PURPOSES, OR FOR ANY OTHER REASON. As an independent contractor, each Independent Business Partner will be responsible for, and agree to comply with, payment of all local and state taxes including but not limited to the goods and services tax (GST) under the New Zealand Goods and Services Tax Act 1985 and A New Tax System (Goods and Services Tax) Act 1999, at the rate prevailing from time to time, including any tax levied in substitution for that tax. Likewise, if an Australian based Business Partner, then compliance with Australian Taxation Office requirements. 2.21 - Legal Compliance Each Business Partner shall comply with all applicable laws including, but not limited to constitutions, statutes, ordinances, codes, and regulations concerning the operation of his/her Business Partnership. Business Partners are responsible for their own managerial decisions and expenditures, including all estimated income and selfemployment taxes. Each Business Partnership is free to establish their own selling practices and business hours, within the guidelines contained in the Governing Documents and/or in any other official Stemtech publications. 2.22 - No Exclusive Territories No Stemtech Independent Business Partner is to imply or state that he/she has an exclusive territory for recruiting and/or selling Stemtech products. There are no geographical limitations for marketing, selling or recruiting purposes within New Zealand or Australia. REV:MAY17
2.23 - Non-Solicitation Stemtech Business Partners are free to participate in other direct sales, multilevel or network marketing business ventures or marketing opportunities (collectively Direct Sales ). However, during the term of the Business Partnership Agreement, Stemtech Business Partners are prohibited from recruiting, promoting, and/or selling the marketing opportunities and/or products of other Direct Sales companies to any other Stemtech Business Partners or VIP/Retail Customers. 15 Following termination of the Business Partnership Agreement, and for a period of ninety (90) days thereafter, a former Business Partner may not utilise Stemtech s trade secret information to recruit, promote and/or sell the marketing opportunities and products of another Direct Sales company to any Stemtech Business Partner or Retail Customer. There shall be a presumption that Stemtech s Trade Secret information was used if the former Stemtech Business Partner recruits a Stemtech Business Partner: a) Business Partner who was in the former Business Partner s Downline Organisation or b) If the former Business Partner met, developed a relationship with or gained knowledge of the Business Partner or Retail Customer by virtue of their mutual participation in Stemtech. During the term of the Business Partnership Agreement any actual or attempted recruitment or enrollment of Stemtech Business Partners or VIP/Retail Customers for other Direct Sales business ventures either directly, indirectly, or through a third party is strictly prohibited. This includes, but is not limited to, presenting or assisting in the presentation of other Direct Sales business ventures to any Stemtech Business Partner or VIP/Retail Customer, or implicitly or explicitly encouraging any- Stemtech Business Partner or VIP/Retail Customer to join another Direct Selling business venture. Because there is an extreme likelihood that conflicts will arise if a Business Partner operates more than one Direct Sales program, it is the business Partner s responsibility to determine whether a prospect is a Stemtech Business Partner or VIP/Retail Customer before recruiting or enrolling the prospect for another network marketing business venture. The term recruit means actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, any Stemtech Business Partner, or Retail Customer to enrol or participate in another multilevel Marketing, network Marketing, or Direct Selling business opportunity. Business Partners must not sell, or attempt to sell, any competing non-stemtech products or services to Stemtech VIP/Retail Customers or Business Partners. Any product or services in the same generic category as Stemtech s product line is therefore a competing product, regardless of differences in cost, quality, ingredients, or nutrient content. Business Partners must not sell, or attempt to sell to any other Business Partner, any products, services, publications, internet tools, or items that may be represented as tools to assist in making the Business Partner more successful at their Stemtech business. ONLY Stemtech produced sales tools may be shared with other Stemtech Business Partners. Stemtech International, Inc. 2017
Business Partners may not display Stemtech products with any non-stemtech products or services in a fashion that might in any way confuse or mislead a prospective customer or Business Partner into believing there is a relationship between Stemtech and the non- Stemtech products or services. Business Partners may not offer the Stemtech Opportunity or product to prospective or existing VIP/Retail Customers 16 or Business Partners in conjunction with any non-stemtech program, opportunity, product, or service. Business Partners may not offer any non-stemtech-opportunity, products, or services during or following any Stemtech related marketing, seminar, or conference (including events sponsored by Stemtech Independent Business Partners). Notwithstanding the foregoing, nothing in this provision shall limit professional healthcare practitioners from offering Stemtech products in conjunction with their professional services. 2.24 - Changes to Business Partnership Agreement Business Partners must notify Stemtech, in writing of all changes to the information contained on his or her Business Partnership Agreement. Business Partners may modify their existing Business Partnership Agreement by submitting the changes to the Business Partner Services Department of the Primary Business Partner s resident country containing the changed information with the words RECORD CHANGE. The effective date of the Agreement will remain the date of the original Application with Stemtech. Stemtech will not change any information on the Application by phone. 2.25 - Changes of Addresses or Telephone To ensure timely delivery of products, support materials, and compensation checks, it is critically important that the Stemtech files are current. Business Partners planning to move or change their address and/or telephone number are to update these details via their Back Office or contact the Business Partner Services Department, who can make these basic changes by phone. To guarantee proper delivery, changes should be made at least one (1) week in advance of any automatic shipments or payments. 2.26 - Adding Secondary Business Partners When adding a co-applicant (either an individual or a business entity) to an existing Stemtech Business Partnership, the Company requires a written request signed by the Primary Business Partner, containing the Secondary Business Partner s personal identification number, signature, and the words RECORD CHANGE in the correspondence. To prevent the circumvention of Section 3.8, the Primary Business Partner must remain as a party to the original Application. If the Primary Business Partner wants to terminate his or her relationship with the Company, he or she must sell, transfer, or assign his or her Business Partnership in accordance with Section 3.8. If this process is not followed, the Business Partnership shall be terminated upon the withdrawal of the Primary Business Partner. Please note that the modifications permitted within the scope of this paragraph do not include a change of Sponsorship. Changes of Sponsorship are addressed in Section 3.5 and 3.7. Stemtech may, at its discretion, require notarised documents before implementing any changes to a Stemtech Business Partnership. Please allow thirty (30) days after the receipt of the request by Stemtech for processing. REV:MAY17
2.27 Inactive Status Any Independent Business Partner who does not place a product order or have a retail direct customer place an order for a six (6) consecutive month period will be cancelled for inactivity. This will disable Back Office access, deactivate any personal website and result in the permanent loss of any downline. It is the responsibility of the Independent Business Partner to monitor his/her activity to remain active. If an Inactive Business Partner wishes to become Active again, he or she must contact Business Partner Services, pay any applicable renewal fee and place a product order either him/herself or through a retail customer. Once a Business Partner is cancelled for inactivity, he or she must wait six (6) calendar months before re-enrolling. SECTION 3 - Sponsorship and Training 3.1 - Sponsoring All Business Partners ( Sponsors ) in good standing have the right to Sponsor and enrol others into Stemtech. Each prospective Applicant has the ultimate right to choose his/her own Sponsor. Stemtech Business Partners are compensated only for the generation of bonus volume, not for Sponsoring new Business Partners into Stemtech. Business Partners are strictly prohibited from enrolling sham Business Partners and causing volume to be generated by or under such Business Partnership for the purpose of meeting qualification and/or earning additional commissions. Prior to signing the Business Partnership Agreement, Sponsors are responsible for reviewing with the applicant the terms and conditions of the Governing Documents. Every Sponsor is expected to exercise the utmost diligence to avoid the appearance that he/she is acting as an employee or agent of Stemtech. The independent contractor status of the Sponsor shall be maintained and clearly represented at all times. A Sponsor may place a new enrollee under another Business Partner in his or her Downline (the Placement Sponsor ). If a Sponsor wishes to assign the new Business Partner to a Placement Sponsor, the placement must be completed in the Waiting Room, (located in the My Organisation section of your Back Office) within the first calendar month of the new enrollee s application submission. 17 3.2 - On Going Training All Business Partners should perform bona fide assistance and training functions to ensure that his/her Downline is properly operating his/her Stemtech Business Partnership. Sponsors should have ongoing contact and communication with the Business Partners in their Downline Organisations. Examples of such contact and communication may include, but are not limited to: newsletters, written correspondence, personal meetings, telephone contact, voicemail, electronic mail, online conduct, and the accompaniment of Downline Business Partners to Stemtech meetings, training sessions and other functions. Sponsors are also responsible to motivate and train new Business Partners in Stemtech product knowledge, effective sales techniques (including how to complete a sale and the preparation of order forms and receipts), the Stemtech Opportunity and compliance with the Company s P&Ps and Governing Documents. Communication with and the training of Downline Business Partners must not, however, violate Section 4. Stemtech International, Inc. 2017
3.3 - Ongoing Communication with Downline Organisation Sponsors should monitor the Business Partners in their Downline organisations to ensure that Downline Business Partners do not make improper product or business claims or engage in any illegal or inappropriate conduct. 3.4 - Ongoing Sales Responsibilities: Regardless of their level of achievement, Business Partners have an ongoing obligation to continue to personally service and promote sales through the generation of new and existing VIP/Retail Customers and his/her Downline Business Partners. 3.5 - Enroller or Placement Sponsor Transfer To protect the integrity of the Stemtech Opportunity and all Downline Organisations and to safeguard the hard work of all Business Partners, Stemtech strongly discourages changes in Sponsorship. Maintaining the integrity of Sponsorship lines is critical for the success of every Business Partner and Downline Organisation. Accordingly, the transfer of a Stemtech Business Partnership from one Sponsor to another is rarely permitted. Aside from placement of Business Partners from the online waiting room within the calendar month after initial enrolment, Business Partners requesting a change of Sponsor must submit a fully completed Sponsorship Transfer Form to the Business Partner Services Department which must include the reason for the transfer along with NZD $310.00 incl GST or AUD $ 250.00. A fee will apply and must be paid in full prior to any transfer approval. The Sponsorship Transfer Form must be signed by the immediate seven (7) Business Partners in the upline of the Business Partner requesting the transfer. A Business Partner may only request a Sponsor transfer one (1) time. In appropriate cases involving fraudulent inducement or unethical Sponsoring, DOWNLINE Business Partnership WILL NOT BE MOVED WITH THE TRANSFERRING Business Partnership. All requests for transfer alleging fraudulent enrolment practices must be submitted to the Business Partners Services Department within thirty (30) days of the date the Application was accepted by Stemtech and shall be evaluated on a case by case basis. It shall be within Stemtech s sole discretion whether the Downline of the transferring Business Partner will be moved along with him or her. Placement of a new enroller under someone in the downline (placement sponsor), must be requested within the first calendar month of the new enrollee s application submission. 3.6 - Cross-Sponsoring Actual or attempted cross sponsoring is strictly prohibited. Cross sponsoring is defined as the enrolment of an individual who, or entity that, already has a current 18 Customer or Business Partner Agreement on file with Stemtech, or who has had such an agreement, within the preceding six (6) calendar months, within a different line of sponsorship. The use of a spouse s, civil partner s companies, or relative s name, trade names, DBA s, assumed names, corporations, companies, partnerships, trusts, federal ID numbers, fictitious ID numbers or any other artifice to circumvent this policy is prohibited. This policy shall not prohibit transfer of a Stemtech business in accordance with Sections 3.5, 3.7, or 3.8. REV:MAY17
If Cross Sponsoring is discovered, it must be brought to the Company s attention immediately. Stemtech may take disciplinary enforcement action against the Business Partner that changed organisations and/or those Business Partners who encouraged or participated in the Cross Sponsoring. Stemtech may also move all or part of the offending Business Partner s Downline to his or her original Downline organisation if the Company deems it equitable and feasible to do so. However, Stemtech is under no obligation to move the Cross Sponsored Business Partner s Downline organisation and the ultimate disposition of the organisation remains within the sole discretion of Stemtech. Each situation will be reviewed on a case by case basis. Business Partners waive all claims and cause of action against Stemtech arising from or relating to the disposition of the Cross Sponsored Business Partner s Downline organisation. 3.7 - Voluntary Termination and Re-application A Business Partner may legitimately change organisations by voluntarily terminating his/her Business Partnership Agreement and remaining inactive (i.e., no purchase of Stemtech products for resale, no sales of Stemtech products, no Sponsoring, no attendance at any Stemtech functions or participation in any other form of Business Partner activity or operation of any other Stemtech Business Partnership) for six (6) full calendar months. Following the six (6) calendar month period inactivity, the former Business Partner may reapply under a new Sponsor. Stemtech reserves the right to waive the six (6) calendar month requirement on a case by case basis. 3.8 - Sale, Transfer or Assignment of a Stemtech Business Partnership Although Business Partners have an interest in and are authorised to operate a Stemtech Business Partnership, the sale, transfer or assignment of a Stemtech Business Partnership is subject to certain limitations. Stemtech Partnerships may only be acquired by or sold, transferred or assigned to Stemtech, the Primary Business Partner s active upline Sponsors, or a non- Stemtech Independent Business Partner upon payment of a fee of NZD310 or AUD250 for administration, data processing costs, which must be paid prior to the sale, transfer, or assignment. Stemtech reserves the right to waive or adjust such fees on a case by case basis. Stemtech Business Partnership may not be acquired by or sold, transferred or assigned to any inactive Sponsors or existing Downline or crossline Business Partners. All Business Partnership sales, transfers, or assignments shall be subject to the approval of Stemtech, which shall not be unreasonably withheld. Stemtech may not approve the sale, transfer or assignment of any Business Partnership that has been in violation of the Agreement within the proceeding twelve (12) months of the request. If a business Partner is considering or desires to sell, transfer or assign his/her Business Partnership, he/she must file or notify the Business Partner Services Department before any sale documents are discussed or entered into. Business Partners who complete a sale, transfer or assignment without the authorisation of Stemtech will be denied and 19 the business partnership automatically terminated by Stemtech. Certain fees apply to all sale, transfer or assignment of a Stemtech Business Partnership for administration and data processing costs. Stemtech reserves the right to waive or adjust such fees on a case-by-case basis. To affect a sale transfer or assignment a Stemtech Business Partnership, the following appropriate legal documentation must be provided to Stemtech: 1. Signed agreement of sale, transfer or assignment. Stemtech International, Inc. 2017
2. NZD310 or AUD250 fee. 3. A completed Business Partner Agreement, including the current Business Partner ID Number, with the words Sale/Transfer/Assignment (whichever applies) written across the document. 3.9 - Transfer Upon Death of a Business Partner Notwithstanding any other provision of these P&Ps, subject to the laws in each state or territory, upon the death of a Business Partner, his/her Business Partnership may be passed to his/her successors in interest according to a deceased Business Partner s will or other testamentary device so long as the provisions of this policy are adhered to and subject to this Policy and Stemtech s acceptance of the nominated successor as a suitable person to hold the Business Partnership. Due to potentially prolonged delays in cases where no will exists, Stemtech will terminate the Agreement upon the death of any Business Partner who dies and leaves no will or other testamentary instrument, so as not to cause undue damage to the business of a Downline Organisation, To effect a testamentary transfer of a Stemtech Business Partnership, the successor must provide the following appropriate legal documentation to the Company to ensure the transfer is proper: (1) a copy of death certificate ; (2) a certified copy of the grant of probate; and (3) a completed Distributorship Agreement in the name of the successor. Appropriate legal documentation must be submitted to Stemtech to ensure the transfer is proper. Accordingly, a Business Partner should consult a Solicitor to assist him/her in the preparation of a will or other testamentary instrument, which should include instruction for handling his/her Stemtech Business Partnership. As Stemtech s P&P s do not permit more than one Business Partnership per Business Partner, an active Business Partner is not permitted to be a beneficiary and will not be considered by Stemtech to be a suitable person to hold the Business Partnership. In the event an active or involuntarily terminated Business Partner is the beneficiary, Stemtech reserves the right to terminate either the deceased s Business Partnership or that of the Business Partner beneficiary. Whenever a Stemtech Business Partnership is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all compensation under the Stemtech Opportunity from the deceased Business Partner s Downline Organisation provided the following qualifications are met. To affect a testamentary transfer of a Stemtech Business Partnership, the successor/(s) must provide the following appropriate legal documentation to Stemtech to ensure the transfer is proper: a) An original death certificate. b) Business Partner letters testamentary or a court order appointing an administrator or executor of the estate and written instructions from the administrator or executor explaining how the business is to be distributed. c) A completed Business Partner Agreement with the words RECORD CHANGE in the section designated for a Sponsor s signature as the Sponsor s signature is not needed. The successor must: 1. Comply with terms and provision of the Agreement and 2. Meet all of the qualifications for the deceased Business Partner s status and REV:MAY17